As reported by CNET News.com, the long-rumored computer sports a 15-inch flat-panel display connected by a pivoting arm to a half-dome base, resembling a desk lamp.
Apple CEO Steve Jobs unveiled the new iMac during his keynote speech Monday at the Macworld Expo in San Francisco.
The introduction of the original iMac more than three years ago fueled Apple's resurgence into the consumer market and ushered in a new era of computer design. But analysts warn that the original iMac could be a tough act to follow.
IDC analyst Roger Kay wonders whether the new iMac's similarity to a lamp could be its undoing.
"I think that it may suffer some from its resemblance to some desk accessory," he said. "The proof will be in the usage of it. If it is flexible to use and the engineering is good, I think people will take to it. If any of that is off, given the look, it could be a disaster."
Another issue is whether it can withstand the rigors of daily use. "Think of your desk lamp and how many times you have knocked it over," Kay said.
Kay noted that the new iMac is similar to the IBM NetVista X, but Apple appears to have conquered some of the design issues that hampered the NetVista X. Apple's computer features a flat panel that swings on an arm above a stable base. IBM's computer either comes with the base and no swinging arm, or it comes mounted on the swinging arm that is anchored to an immobile spot on a desk or wall.
Apple itself built up anticipation for the new product, posting tantalizing messages on the front of its Web site for the week leading up to Macworld. Speculation had centered on a long-rumored flat-panel successor to the iMac.
Michael Franet, a hobbyist photographer from Walnut Creek, Calif., had not seen the news reports about the new iMac before he attended Jobs' speech.
When he first saw the iMac on stage, Franet said, he was "a little apprehensive" at the futuristic design. In addition, he was disappointed that the new iMac did not break the 1GHz barrier.
"I would have put in my order immediately...if it was faster," said Franet, who has been using Macs since 1984.
Still, he was impressed with the product because it takes up less desk space than other computers and because the screen can move around.
ARS analyst Tony Duboise praised the new iMac's space-saving design. "This is something people might not mind having in their living room, say, in the corner or something. This is a problem desktops have had. They're not aesthetically pleasing."
But she remained cautious about a design she characterized as "really, really different."
Bill Brown, an IT specialist in California, said "the picture of it with the speakers next to it reminds me of the robot in the movie 'Short Circuit,' a popular kid-vid."
NPD Intelect analyst Stephen Baker doesn't especially like the look of the new iMac, but he is willing to give it a chance.
"While the product seems physically awkward, it is certain to be a heavy seller among the Mac fans eager to upgrade their iMacs into a bigger screen-size product," Baker said.
Flat panels were wildly popular over the holiday-shopping season, with 15-inch ones selling for less than $300 at many major retailers. Baker said there are "no real instances" of successful all-in-one flat-panel computers thus far. But "there were no real successful all-in-one CRT-based PCs before the iMac," he said.
If nothing else, Apple apparently made the right choice dumping cathode-ray tube monitors for liquid-crystal displays.
"The 15-inch LCD is right on," Duboise said. "People are definitely hungry for the flat display."
The price is right?
Apple's larger problem selling the new iMac could be price as much as anything else. With fully loaded Pentium 4 PCs selling for as low as $700, even the $1,300 entry-level iMac could be a tough sell.
"I don't know how well (the new iMac) will be perceived because what's pushing the market is PCs being offered at such reasonable prices with stepped-up performance," Duboise said.
Gartner analysts Mark Margevicius and Michael Silver say for mainstream corporate Mac customers, the iMac is a reasonable option, (but) education customers will
have to consider whether they can still afford to buy Macs.
The entry-level model comes with a 700MHz PowerPC G4 processor, 128MB of RAM, a 40GB hard drive, a CD-RW drive and 10/100 networking for around $1,299. The midrange model bumps the memory to 256MB and the optical drive to a combo CD-RW/DVD model for around $1,399. The $1,799 top-of-the-line model packs an 800MHz G4 processor, 256MB of RAM, a 60GB hard drive and a DVD-recording drive.
"Prices are good for what you get--a bit stiff for a family kid machine, especially as compared to the low-end CRT iMac--but not unreachable," Brown said.
"I think the bump up in processor and graphics chips were unexpected and a good bonus," he added. "I've wanted a flat screen for several years. The extra USB ports are particularly nice as it means most users won't need to mess with a hub and that tangle of wires."
The high-end model goes on sale later this month, the midrange in February, and the entry-level in March.
The high-end model does hold up well, for example, when compared with one of Gateway's standard PCs with comparable features. Gateway's 500c PC packs a 1.5GHz Pentium 4 processor, 256MB of RAM, 20GB hard drive, DVD recording drive and a 15-inch flat-panel display for $1,888.
But Gartner Dataquest analyst Charles Smulders said timing could be as much a problem for Apple as pricing, particularly with PC sales in double-digit declines.
"The issue is, given the current economic environment, is it a good time to be launching new products?" he said.
Still, "Apple was long overdue to update the iMac," Smulders added. "If you look at iMac sales, they peaked in 1999. We saw in 2000 and 2001 slower sales."
During his Macworld keynote address Monday, Jobs said the company has sold 6 million iMacs since their introduction in 1998. Gartner Dataquest's figures show sales of a few hundred less, but with a dramatic drop off after 1999.
The research firm said Apple sold nearly 1 million iMacs the year of introduction and another 2 million in 1999. Apple sold 1.6 million units in 2000 and an estimated 1.2 million last year.
Overall, NPD's Baker asserts that the new iMac might have what it takes to keep Apple's loyal following clamoring for more.
"While looks are always significant--especially for Apple--it seems just as important that Apple has finally decided to imbue the iMac with G4 processors, stepping up the power of their consumer-focused line to be more in sync with the Power Macs," Baker said.
"The combo of bigger screens, faster processors and a continued emphasis on developing and offering hardware and software focused on what the Mac and the Mac OS does best seems like a winning strategy for Apple as a niche player in the grand scheme of the Wintel PC market," he said.
News.com's Scott Ard and Michael Kanellos contributed to this report.